SFC ‘cautiously’ mulls temporary delisting of companies

The China Post staff

The Securities and Futures Commission (SFC) yesterday indicated it may not accept a suggestion by lawmakers that the government allow companies whose shares have tumbled below a certain level to be temporarily delisted to give them time to recover.

Chu Chao-chuan, deputy head of the SFC, said such a move may risk the market liquidity as well as the normal trading of warrants and futures. The SFC will weigh the recommendation cautiously, said Chu. Chien Hsi-chieh, a Democratic Progressive Party lawmaker, said yesterday the SFC should consider allowing enterprises to be delisted for six months to grant them a chance for financial rehabilitation. Transactions of these companies’ stocks can be resumed after six months with a net value of NT$10 per share, Chien suggested. Chien’s Kuomintang counterpart Chu Li-lun said the government should introduce a temporary delisting mechanism in the face of the seemingly free falling stock market recently. Taiwan shares closed lower yesterday in lackluster trading amid lingering concerns of declining global demand for technology products and the probable impact on Taiwan’s economy. The TAIEX closed down 103.33 points, or 1.95 percent, to 5,174.00. On Saturday, the benchmark index fell 1.21 percent to 5,277.35. Yesterday’s turnover was the lowest since Oct. 30, valued at NT$28.62 billion (US$894 million), down from Saturday’s NT$53.05 billion. Decliners outnumbered gainers 390 to 127 with 78 stocks unchanged. Share prices fell shortly after the open amid worries that a fall in prices of dynamic random access memory (DRAM) chips and flash-memory chips would affect companies in Taiwan, analysts said. Investors stood by the sidelines throughout the day, waiting for the November earnings reports Please see SFC on page

from Taiwan electronics companies, said Johnson Wang, vice president at Sun Securities Investment Consulting Co. The technology subindex, which accounts for around 30 percent of market capitalization, fell 2.6 percent to 260.85 points. Among the most actively traded stocks was United Microelectronics Corp., which shed 2.88 percent to NT$50.50. Taiwan Semiconductor Manufacturing Co., the world’s largest dedicated chip foundry, fell 2.22 percent to NT$88.00. Together, both stocks account for about 20 percent of total market capitalization. Acer Inc., Taiwan’s largest PC maker, was unchanged at NT$20.60.